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SAN FRANCISCO-Proposals to change the state's workers compensation medical fee schedule would unduly increase doctor compensation and employer and insurer costs, the California Workers Compensation Institute is warning.

The San Francisco-based CWCI aired its concerns in a July 16 bulletin in response to recommendations by California's Industrial Medical Council. IMC members maintain the CWCI bulletin is in error.

The CWCI represents insurers and self-insured employers; the IMC is a 16-member panel selected by the governor and legislative leaders to regulate workers comp physicians. The panel, a unit of the state's Department of Industrial Relations, consists of 15 doctors and one medical economist.

The IMC is proposing that the Division of Workers Compensation, which is also a unit of the Department of Industrial Relations, change medical fee schedule ground rules and instructions for medical service utilization, according to the CWCI. That would include changes to standards governing the use of physical medicine, which includes electrical stimulation, massage, cold packs and whirlpool baths.

The changes amount to a liberalization of standards that could substantially boost payments to providers because they would be allowed to provide more treatments, the CWCI maintains.

Typically, increased utilization, not unit price, raises medical costs, the institute said.

Additionally, one-third of the $1 billion in workers comp payments to doctors and therapists in California in 1996 was for physical medicine.

"It's a big chunk of change," a CWCI spokesman said. "It should not be ignored if they are going to allow looser utilization standards."

But the CWCI bulletin is misleading, said Richard Sommer, vice chairman of the Industrial Medical Council. He also serves as chairman of the IMC's Subcommittee on Medical Fee Schedule and Utilization.

Mr. Sommer points out that the fee schedule change recommendations outlined in the CWCI bulletin did not come from the IMC alone.

The recommendations represent the consensus of a variety of California workers comp community members, including the CWCI and other payers, Mr. Sommer said.

Payers and providers met numerous times to assess recommendations that were made to Casey Young, executive director of the state's Department of Workers Compensation. Mr. Young is preparing to announce a date for formal hearings on changes that he will make to the medical fee schedule.

CWCI authorities say the meetings often contained more medical providers, meaning there was not true consensus.

For his part, Mr. Young said some doctors are abandoning workers comp practices because of restrictions on their billing procedures that have not been changed in many years.

He said he is willing to change evaluation and management codes that doctors use to bill for office visits and for the coordination of employee care.

Physicians maintain they are underpaid for such services. The CWCI disagrees and wants to alert employers to take note of the issue.

"We just want to make sure that everyone is aware of what is going on and that (Mr. Young) has full knowledge when he makes these decisions, because a lot of times it seems like things are not necessarily fully addressed or publicized, and sometimes the impact can be major," the CWCI spokesman said.